During the annual fundraising drive, the Cancer Society raised $900,000 in pledges of financial support for their general operations. By the fiscal year-end, the Society had collected $600,000 of the pledges. The Society estimates that 10% of the remaining pledges will be uncollectible. The NET amount of revenue the Society should recognize during the current year from this pledge drive is A. $900,000. B. $870,000. C. $810,000. D. $600,000.

Question

Jadon Carey

Business

11 August, 04:36

During the annual fundraising drive, the Cancer Society raised $900,000 in pledges of financial support for their general operations. By the fiscal year-end, the Society had collected $600,000 of the pledges. The Society estimates that 10% of the remaining pledges will be uncollectible. The NET amount of revenue the Society should recognize during the current year from this pledge drive is A. $900,000. B. $870,000. C. $810,000. D. $600,000.

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Answers (1)

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Payton · Answer 1

The amount to be reported as net amount of revenue in the current year from the pledge drive is $870,000 option B

Explanation:

The net amount amount of revenue the society should recognize in the current year from this pledge drive is the actual collected plus the remainder of the pledge which is $300,000 minus the provision for uncollectible pledge i. e 10%*$300,000

The net amount of revenue=$600,000+$300,000 - (10%*$300,000) = $870,000

The correct option is B, net amount of revenue of $870,000 recognized